Are you ready to completely abandon CDs? The choice has been made for you.
Today, Side-Line Music Magazine published an article, outlining the plans of major worldwide record labels to completely abandon the CD format as we know it. The reasons seem to be quite obvious: low demand for the traditional “album” outside of limited edition releases and labels will spend less money distributing the album. But does the digital download devalue the music? Does the CD, and the tape, and the 12 inch vinyl before it, offer a quality that is unmatched by simply digital consumption? Will we further devalue music because of the ability to instantaneously access it?
One party stated that a possible upside might be the label will spend less money on the album in total, thus allowing for less money to be recouped from the artist, and therefore allowing the artist to generate more income from the album’s release – wrong. The label will just allocate the “costs” to some other phantom expense on the balance sheet, probably into marketing as this fascination with the juxtaposition between social media and music continues to climb at an unprecedented pace.
Many business around the world will become defunct, with the consolidation of music distribution becoming more and more concentrated into the hands of the few, to be rationed out to the masses. These “hands” will more than likely iTunes, Spotify, Amazon, and Facebook, who has recently been inking deals with several music streaming services in order to add integration into its user account architecture. Amazon is the most interesting of the bunch, as it is currently the world’s largest CD distributor, and probably in the top 5 globally ranked online streaming services as well. This is going to put a lot of pop into this stock, for those of you interested in that sort of thing.
This transition is supposed to occur over the next 5 years, and Amazon is poised to be the basket that will hold all limited edition releases of CD albums in the not to distant future. So it seems that with the devaluation of the album, it will find itself resurrected in other forms. Clearly the labels expect to increase their profit margin on their musical product. But who is to stay the world’s heavyweight digital music companies won’t jack up the prices on the labels over time…food for thought.